Setting and Achieving Goals for Business

Setting goals for business: an absolute must for any company hoping to thrive long-term. We’ve already discussed Big, Hairy, Audacious Goals (BHAGs). To recap, BHAGs are long-term, ultimate goals for your company. In the above article, we discussed Elon Musk’s BHAG for SpaceX: to someday colonize Mars. To be sure, that’s not a short-term, easy-to-achieve quarterly goal. Your BHAG, however, will consist of these short-term goals (although they should not be easy to achieve). For those, we’ll look at Locke’s Goal-Setting Theory.

Business GoalsLocke’s Goal-Setting Theory consists of five components:

  1. Setting clear goals
  2. Setting challenging goals
  3. Securing team commitment
  4. Gaining feedback
  5. Considering task complexity

Let’s break these components down and look at each one individually.

Setting Clear Goals:

A manager needs to ensure that all employees understand what, exactly, they’re attempting to do. If you’re attempting to manufacture 50 widgets per month, then ensure every single employee understands that. In fact, if you don’t have a prohibitively large team, you might even ask each person to repeat the goal to you.

Setting Challenging Goals:

Managers want the best from their employees, and employees enjoy the challenge of achieving something difficult-yet-attainable. It’s a win-win for both parties provided you haven’t set a goal that’s a bit too onerous (we’ll touch more on this in #5). Once your employees have reached their goal, be sure to reward them with recognition for a job well done, and potentially some special treat (pizza party, catered lunch, etc.).

Securing Team Commitment:

Every goal needs buy-in from the team. Motivation is one of the top factors affecting performance, and employees who disagree (or are discouraged) by a goal will perform at sub-optimal levels. Listen to your employees. If possible, ask for their input. It’s important for employees to feel like they’re being heard.

Gaining Feedback:

As we just mentioned, employees want to feel heard. It’s a manager’s job to listen to what they’re saying and take action. Employees are very valuable sources of information. They see things you might not, and it’s likely that they (more than you) have their finger on the pulse on their fellow employees’ thoughts and emotions. So, again: listen carefully, then act as necessary.

Considering Task Complexity:

Ensure every employees has the requisite knowledge, skills, and abilities (KSA’s) before they engage in complex or difficult tasks. Putting employees in positions in which they struggle will only frustrate them and, possibly, lead to turnover (which can cost you 1.5-2.5 times their annual salary to replace them!). If an employee doesn’t have the requisite KSA’s, have a more experienced employee serve as a coach or mentor until their skills are up to par.

In summary, you’ll first need to first establish a BHAG. Once you have that, work backward from your BHAG, setting a series of milestones you’ll need to achieve in order to achieve your ultimate goal. Use the above components to set those milestones. Additionally, some milestones will require sub-goals. Set those with care, too.

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